SO YOU WANT TO BUY A HOUSE?
HERES’S HOW TO MAKE THE LOAN PROCESS GO SMOOTHER!
After you’ve determined you’re ready to purchase a home, it’s time to find a lender, a Mortgage Consultant to work with you to achieve your goal. You may have some idea how much you can spend on a house, and of course if you’re planning to make a cash purchase you can skip this step all together, but most people aren’t and will need financing to acquire their dream home. Getting prequalified/preapproved for financing is the first and most important step. Knowing how much you can spend and are qualified to borrow is key to purchasing a home.
It is important to work with a knowledgeable proven Mortgage Consultant who will guide and educate you throughout the process, a person who is local, accessible and will get you to closing on time. This is super critical last step! If you don’t know who to turn to, your Realtor can recommend trusted lenders for you to consider. And, even if you’re not ready to buy for a while, it’s a very good idea to identify the lender you’d like to work with and have them take a look at your credit and financial situation. They can discuss your credit standing and if necessary offer suggestions to improve your financial situation, also catch any errors in the credit reporting. Sometimes just getting a car loan paid off can be the difference in qualifying for home financing or not.
Terrence Schenk, a Senior Mortgage Consultant with Prosperity Home Mortgage is always available to his clients as a resource for mortgage loan knowledge. Working with someone who is able to provide this type of service is especially beneficial to first time buyers. Terry says, “The mortgage process can be stress free and go smoothly when approached the right way. It is important to choose an experienced reputable loan officer and lender. Provide them with all of your information and documentation upfront and ideally before you start looking at homes. Check in with them before you make any employment changes, move money around, make large deposits or make large purchases. When additional documents are requested, make that a priority and get them the documentation right away.”
As part of the application process, your credit, income and assets are verified. It’s important to pay your bills on time and keep your accounts current throughout the loan process. Prior to closing on the house, accounts and credit will be checked again. Maintaining good records and retaining copies of your paystubs, paid credit card bills and any accounts that may have been paid off and closed is imperative.
Things that may affect the application process:
- Changing employment unless it is the same line of work for equal or more income
- Applying for more credit or co-signing for others, causes an additional inquiry to your credit report
- Making major purchases – furniture, car, etc. will impact credit or personal funds
- Changing bank accounts or transferring money to other accounts
- Failure to properly document gift funds* intended to be used towards closing costs
*Gift funds and large deposits require special handling and documentation. The path of the money must be traceable and the purpose identified.
After receiving home loan approval, be aware of issues that can impact the financing process. The following challenges can potentially delay your closing or even impact your ability to obtain a mortgage.
- Inform your Mortgage Consultant prior to making any employment changes
- Continue to make payments on existing accounts
- Making major credit purchases and co-signing on another loan
- Retain your savings, don’t use it to pay off credit debts
- Refrain from making large deposits to your bank accounts and opening new accounts
- Cash advances from a credit card is not an acceptable source of money for the earnest money deposit or closing costs
- Maintain existing bank accounts and don’t transfer funds within existing accounts
- Contact your mortgage consultant for any and all questions and concerns
The more information you provide your Mortgage Consultant upfront, the smoother the loan process will go. Getting all the information initially allows the Consultant to see the entire financial picture and minimize the surprise factor. Communication is key, timeliness and accessibility as well. Ask questions to ensure you have a clear and full understanding of the process and details. After all, it’s all about YOUR financial future and new home!